What will be tested on the next CPA exam

As the business environment has changed, a shift has occurred in the type of work newly licensed CPAs perform.

Technical proficiency of accounting, auditing, and tax concepts remains important. Following the AICPA Examinations team’s most recent practice analysis, feedback from the profession indicated that the Uniform CPA Examination should evolve so that it will continue to measure the knowledge and skills a newly licensed CPA uses on the job.

As a result, the CPA exam’s historical assessment of remembering and understanding and application skills is being modified, with an increasing emphasis on higher-order analysis and evaluation skills.

On Monday, the AICPA announced the details of the updated CPA exam design, which will include assessment of those higher-level skills (see the chart, “New Focus for the CPA Exam,” for a comparison of how the questions will be distributed on the next exam).

The next CPA exam will debut in April 2017 in its first major update since 2011.

“Remembering and understanding certain fact patterns isn’t enough,” said Michael Decker, AICPA vice president–Examinations. “Outsourcing and technology have dramatically impacted the work that newly licensed CPAs undertake earlier in their careers. Newly licensed CPAs have to be able to assess situations and apply professional judgment. So it’s not just being book-smart, but the young CPA’s ability to apply that knowledge in completing tasks they will encounter as a newly licensed CPA.”

Why the exam is changing

The CPA exam is designed to provide state boards of accountancy reasonable assurance that those who receive passing grades have sufficient technical knowledge and skills to be licensed. The AICPA periodically conducts a practice analysis to ensure that the exam measures the right knowledge and skills to protect the public interest and meet the needs of the boards of accountancy as they license CPAs.

A practice analysis launched in early 2014 collected input from boards of accountancy, state societies, public accounting firms, academics, standard setters, regulators, and business and industry on the knowledge and skills needed by newly licensed CPAs. The research revealed that because of advances in technology and outsourcing of routine tasks, newly licensed CPAs increasingly need to use higher-order cognitive skills and professional skepticism while performing tasks such as planning and reviewing the work of others. Read more on the Journal of Accountancy.